Though Applied Digital, the company that markets the human-implantable VeriChip device, has trumpeted recent Food and Drug Administration approval of the technology, it failed to include in its announcement warnings by the agency about the downsides of having a transponder lodged under the skin.

According to a letter issued by the FDA Oct. 12, the ID chip, which is touted as an immediate way to obtain medical history about the wearer, has several possible negative effects.

Katherine Albrecht, founder and director of CASPIAN, chastised Applied Digital and manufacturer Digital Angel for failing to mention the negative aspects of its technology.

"By omitting this information from their press material, the companies marketing the VeriChip have painted an inaccurately rosy picture of their product that could mislead consumers into believing the devices are completely safe," Albrecht said in a statement.

Albrecht singled out the MRI-incompatibility issue as one of particular concern.

"Patients contemplating a VeriChip implant need to know that the FDA has raised incompatibity as a potential risk," she said. "If it's a choice between a potentially life-saving diagnostic procedure or a VeriChip implant, I believe most patients would choose the MRI."

In addition to outlining the health risks of the VeriChip, the FDA letter also cites the risk of "compromised information security" among its concerns. The implant, about the size of a grain of rice, uses radio waves to transmit medical and financial account information to reader devices. There is a risk that these transmission could be intercepted and duplicated by others or that – as privacy advocates have warned – the devices could be used to track an individual's movements and location.

"Once you're chipped, you can be identified by doorway portal readers without your knowledge," stated Albrecht. "That tracking potential, coupled with VeriChip's potential health risks make the VeriChip a very poor choice for medical patients seeking safety and security."